Tokens called a great financial invention: usage barely correlates with value

A discussion on the economics of token-based billing unfolded on November 7. lujasper offered the central observation: tokens will go down in history as one of the greatest financial inventions — never before has a metered resource had such a loose link between consumption and the value actually created, and this tension sits at the heart of the AI business model.

Confirmed

The original take came from lujasper, with JoshPurtell joining in and the two exchanging points repeatedly
JoshPurtell argued that third-party agent harnesses (orchestration frameworks) aren't necessarily wasteful; the real problem is linear token pricing: paying linearly by volume gives framework designers no incentive to slim down context
He noted that no agent genuinely needs 1 million tokens — that's pure inefficiency; with a properly rationalized harness and inference settings, consumption could drop to around 300,000 tokens
He also pointed out that tokenizers cost almost nothing, yet the industry hasn't standardized on one for billing; Anthropic's tokenizer has long been accused by users of inflating token counts, which doesn't hurt performance but directly affects billing
Distorted demand means consumers end up favoring lower-utility tokens when choosing models

Why it matters

The discussion exposes a fundamental contradiction in the AI industry's business model: decoupling the billing unit from value delivered could distort behavior on both the supply and demand sides over the long run
If pricing mechanisms don't evolve (e.g., toward outcome-based or bundled pricing), vendors have little incentive to optimize token efficiency, and users ultimately foot the bill

2026-11-07 ~ 2026-11-07 · 5 related posts

Primary sources

Tokens will go down as one of the great financial inventions of all time — lu__jasper · 2026-11-07 00:42 (UTC+08:00)
Linear token pricing kills incentives: optimized agents could run at 300k tokens — JoshPurtell · 2026-11-07 00:55 (UTC+08:00)
Why has the AI industry not standardized a billing tokenizer? — JoshPurtell · 2026-11-07 00:53 (UTC+08:00)

[source] Tokens will go down as one of the great financial inventions of all time — lu__jasper · 2026-11-07
Tokens called a great financial invention as billing decouples from value — JoshPurtell · 2026-11-07
[source] Why has the AI industry not standardized a billing tokenizer? — JoshPurtell · 2026-11-07
[source] Linear token pricing kills incentives: optimized agents could run at 300k tokens — JoshPurtell · 2026-11-07
Linear token pricing breeds bloated agents — rationalized harnesses could run at ~300k tokens — JoshPurtell · 2026-11-07